Private Lending for Senior Housing
With an aging population, the senior housing market offers investors a great deal of scope to add an alternative arm to their portfolio. There are many options for financing such deals, although the large sums involved in such commercial investing tend to make this a pathway for those with plenty of experience.
For those who want to raise such funds, loans from private investors are often the way forward. Such borrowing is suitable for all kinds of senior housing, including retirement homes, assisted living facilities, and other real estate designed for older citizens.
Your Options for Senior Housing Facility Loans
- A brief mention about Fannie Mae and Freddie Mac senior facility loans
- Other senior housing and assisted living facility financing
A brief mention about Fannie Mae and Freddie Mac senior facility loans
While these types of lending are not directly from private lenders (they’re both government-sponsored and bank and credit union-supplied), they can be obtained through such financing companies.
Both types can be utilized for virtually all types of senior living facilities, including assisted care and independent living.
Fannie Mae borrowing can be spread across anything from 5-30 years. Freddie Mac term lengths depend on whether you choose an adjustable-rate loan (typically over 5-10 years) or a fixed rate (up to 30 years).
Other senior living and assisted living facility financing
Investing in such projects typically involves larger sums of money than, say, individual investors going for a fix-and-flip or BRRRR (buy, rehab, rent, refinance, repeat) purchase. Because of the larger scale of senior housing projects, borrowing is often determined in millions, rather than tens or hundreds of thousands of dollars.
More typical hard money loans for senior living facilities tend to be secured over relatively short periods. This might be anything from 6-24 months, often with interest rates as much as 12% (for an interest-only loan).
Borrowing for senior housing investments is usually provided by lenders who also specialize in other commercial ventures, such as hotels, office buildings, industrial, and warehouses, etc. However, senior housing facility loan programs are a niche product that not all hard money lenders will service.
It’s also worth knowing that private lending for senior housing doesn’t just cover the building and construction of such a facility. It can also include:
- The acquisition of an existing facility.
- Renovations and refurbishment to improve the care provided.
- Refinancing of an existing facility.
It’s important to look at all the options available for financing a senior living project. Private lenders’ products range dramatically, both in how quickly they make finances available and the interest rates charged. Because the figures involved are considerable, every 0.01% increase in the borrowing rate—even over the shortest of terms—has a significant impact.
Such commercial investment is, technically, possible for anyone to achieve. However, they are more suited to more experienced investors and/or business ventures. Nonetheless, for those who qualify as accredited investors, there’s the possibility of investing in private funds. This is where individuals club together to increase spending power to finance larger projects, such as senior living facilities. In such cases, a good hard money lender can craft a personalized loan product to help raise the required capital.
Looking for Senior Housing Facility Loans & Other Options? Speak to BRRRR Loans Today
As one of the country’s leading private lenders, BRRRR Loans offer a portfolio of options that increase your financing choices outside of regular government and bank lending. Because we base our lending criteria on the property’s worth, rather than personal circumstances, we’re able to provide investors with a wealth of opportunities to diversify—with senior housing facility loans being one of our specialties.
Discover more at https://www.brrrr.com/ and call today—together, we can discuss the art of the possible.
Buy, Rehab, Rent, Refinance, & Repeat. A nationwide direct lender to real estate investors. If you have a project that needs to be funded, you’ve come to the right place.